Shill Bidding is the use by dishonest sellers of more then one of their ebay accounts, or the accounts of friends/family, to bid on their own items to increase the hammer price of their auctions.

More sellers are using this dishonest practice since ebay (unfairly) increased their seller final value fee charges. Sellers therefore try to reduce their costs by listing an item with a starting price of 99p, this price gives them a free listing, otherwise they'd be charged between 15p and 40p+ just to list the item. But to ensure the item doesn't sell too cheaply, they shill bid. Of course sometimes if they misjudge the price, they'll end up buying their own item. In those circumstances they simply play the non paying bidder, they don't contact or pay the seller (themselves of course), and so get a fee refund from ebay.

It used to be relatively easy to spot shill bidding as the bidders identities were displayed for all to see. But now ebay has replaced them with anonymous bidder1, bidder2 .... identities, supposedly for a more secure shopping experience, its harder to spot if you don't know how.

To find out if a competitor bidder isn't genuine, go to the auction and look for "Bid History" (you'll find this under "time left"), then click on the number of bids. You'll go to a list of the bidders, it will look something like this. The more bids there are, the more entries there will be in the list.

Bidder 2    £11.00  17-May-09 14:15:05 BST

Bidder 4    £10.51  17-May-09 14:12:21 BST

Bidder 2    £7.50    16-May-09 11:23:58 BST

Bidder 1    £7.00    15-May-09 11:09:08 BST

Bidder 2    £7.00    16-May-09 11:19:46 BST

Bidder 2    £2.00    16-May-09 11:19:36 BST

Starting Price £0.99  13-May-09  20:15:57 BST

Any of these bids could be from a shill bidding identity, the clever shill bidders will give up early. But lets assume this seller is quite greedy, click on the highest bidder, in this case bidder 2.

When the bidders identity is clicked on you will see the bidders recent bidding history. The sellers identity is "protected" - Seller 1, Seller 2. Each entry consists of an entry number, the category of the item bid on, the number of bids made in that auction, the seller identity and the approx time of the last bid. It will look a little like the example below, although this has been compacted to fit the page.

Item 1 Radio Equipment > CB Radio      4   Seller 1  1d
Item 2 DVD, Film & TV > DVDs           4   Seller 2  4h
Item 3 Computing > Vintage Computing  1   Seller 1  2d 7h
Item 4 Travel > Luggage                         2   Seller 1 <1h
Item 5 Men's Shoes                                1   Seller 1  3h
Item 6 Power Tools & Equipment         11   Seller 1  23h

On the same page, look under the heading "30 day guide", you will see "Bid Activity with this seller". This example will have 83% bid activity with this items seller. Because the percentage is so high its easy to work out that the seller of your item must be seller 1 in the above bidding history list.

As you can see in this example, almost all of this bidders activity has been devoted to the seller in question apart from a break when he did a bid of DVD shopping. Of course this isn't 100% proof of shill bidding, but I personally would stay clear from this seller for the time being. Although it isn't definitive proof, what's the chances of anybody ever being in need of such a wide variety of items and coincidentally find them all with one seller.

But this method isn't foolproof. If the seller is auctioning many items of the same category, and these items are sought after by collectors, a collector may indeed bid on many items from one seller.

When deciding if a seller is shill bidding you have to weigh up the facts. Your decision will based upon the number of items recently bid on by the suspected bidder, the percentage of those bids made on the suspected sellers items and the variety of the items categories. A 100% bid activity means nothing if the buyer has only recently bid on one item. But if the buyer has say 70% bidding activity with the seller and has bid on multiple items then thats suspicious.

You can check further by clicking on "see other items" in the listing your bidding on. This will take you to the other items the selling is auctioning. Then click on "completed listings" in the left column, this will show you the sellers past recent sales or items which have failed to sell. If you can see the item your bidding on here, and the price is in green signifying a sale (red means unsold), its a possibility the seller won his own item. Of course there are many bad buyers out there who fail to pay up, but if there is also suspicious bidding activity on the sellers current items, this increases the possibility of shill bidding.

An honest seller will have to wait at least 7 days to relist, if a non paying buyer co-operates, or 15 days (currently as of 2/9/09) if a buyer doesn't get in contact at all. A dishonest seller may relist within a few days or even less, as a shill bidder knows the "buyer" wont pay or leave negative feedback.

Ebay has made finding dishonest sellers harder by banning negative feedback for buyers, so an absence of feedback to a non paying buyer isn't evidence anymore that a seller has won his own item.

I wouldn't bother complaining to ebay if an obvious case of shill bidding is discovered, ebay will seldom do anything let alone ban a seller. Ebay could of course restrict shill bidding, they could place a ban on a buyer bidding on a sellers items for 3 months if they fail to complete a transaction with that seller. This would mean a regular seller requiring more identities then would be practical.

Also I would advise you to avoid private auctions, these are auctions where the bidders identities are completely "protected", in other words hidden. Its rare to find an auction were private bidding is justified, and in my experience most private auctions usually produce a higher final hammer price than ordinary auctions. I think they're a gift to shill bidders.